Fixed-term employee wins unfair dismissal claim

The Employee Appeal Tribunal (EAT) recently confirmed that an employee whose fixed-term contract was not renewed was unfairly dismissed.

Legally, when an employee’s fixed-term contract is not renewed after it expires, that is a dismissal (section 95(1)(b) of the Employment Rights Act 1996 (ERA)) and, if the employer does not act fairly then the employee may argue they were unfairly dismissed.

Facts of the case

In the case of Royal Surrey County NHS Trust v Drzymala, Ms Drzymala had been working as a doctor on a succession of fixed-term contracts for the NHS Trust. When, eventually, her fixed-term contract was not renewed and a permanent employee was appointed in her place, Ms Drzymala brought the unfair dismissal claim.

EAT decision

The EAT upheld the Employment Tribunal’s ruling that an employer who complies with the Fixed-Term Employee (Prevention of Less Favourable Treatment) Regulations 2002 is not necessarily acting fairly for the purposes of an unfair dismissal claim when not renewing an employee’s fixed-term contract.

As in other unfair dismissal cases, the question of whether a dismissal is fair or not depends on the facts of the case, and how those facts measure up against the fairness test set out in the ERA (section 98).

In this case, the EAT agreed with the employment tribunal’s decision that the employer had acted unfairly by initiating discussions on alternative employment for Ms Drzymala, and then retreating from those discussions.

The employment tribunal had stressed that an employer does not have to discuss alternative employment possibilities every time a fixed-term contract is due to expire, and the EAT agreed with this finding. However, in this case, because the Trust had begun such discussions and then retreated from them, the dismissal was unfair.

Comment

It should be noted that individuals on fixed-term contracts are still generally required to have two years’ service before they can bring a claim for unfair dismissal in the employment tribunal.

The question of whether or not a fixed-term employee’s dismissal is fair will depend upon the facts of the case. While employers have no strict obligation to discuss alternative employment opportunities with employees reaching the end of their fixed-term contracts, they should consider whether it might be appropriate to do so in each case.